Article ID: | iaor2008503 |
Country: | United Kingdom |
Volume: | 35 |
Issue: | 5 |
Start Page Number: | 524 |
End Page Number: | 532 |
Publication Date: | Oct 2007 |
Journal: | OMEGA |
Authors: | Wikner J., Naim Mohamed M., Grubbstrm R.W. |
Keywords: | financial, production |
This paper shows the impact of using the net present value (NPV) on parameter selection in the ordering policy of a production planning and control system. Using a well understood and documented model, the net present value is used as an objective function to determine the discounted future variance costs resulting from the model's dynamics. The NPV of the variance (NPV